Enforcement Directorate (ED) arrested four people related to Vivo in a money laundering case on Wednesday. The arrested people include a Chinese national and Hari Om Rai, MD of Lava International. ED alleges that Rai was approached by Vivo for helping them establish their business in India. It further added that Rai was offered an initial funding of Rs 3.17 crore for setting up offices and residential accommodation of Chinese national of Vivo Mobile India Pvt Ltd and its state distributors via Labquest Engineering Private Limited.
The four people arrested in this case include Guangwen Kyang aka Andrew Kuang, the Chinese National; Nitin Garg, the Chartered Accountant (CA), Malik and Rai. The court had sent them to three days of ED custody.
The Unofficial Link
ED revealed that no official agreement was signed between Lava International and Labquest for such funds, which makes them even more questionable. ED stated, “Furthermore, no collateral or security was given by Labquest towards Lava International for these fund transfers. This clearly shows that these fund transfers were not genuine business transactions. From May 2014 to December 2014 Lava International had transferred funds totaling Rs 2.62 crore to the account of Labquest Engineering Private Limited.”
Connections with Vivo and BBK
ED further added that Labquest Engineering Pvt Ltd had authorised Lava International employees to execute the lease deeds for acquiring office space for the state company. According to ED, Rai has confessed that he knew the CEO of BBK Technology Communication Co, Ltd, Shen Wei. Lava International had also issued invitation letters for business visas for Chinese nationals associated with Vivo Mobile Communications Co. Ltd and other Chinese entities.
Employee Disclosures
ED has also alleged many Vivo employees are working in India without appropriate visas and are in violations of business visa terms. As per the official statement, “Documents collected so far during investigation have revealed that at least 30 Chinese individuals entered India using business visas with the intent to work as employees in Vivo companies. Though they worked for Vivo companies in India, they never disclosed Vivo companies as their employer in their Visa applications. Thus, they have concealed information regarding their employer in their visa application and cheated the Indian Embassy or Missions in China.”
They have also been travelling across India, including sensitive areas like Jammu & Kashmir and Ladakh.
We have reached out to Lava International for an official statement.
Vivo in a statement told Business Today, “Vivo firmly adheres to its ethical principles and remains dedicated to legal compliance. The recent arrest deeply concerns us. We will exercise all available legal options.”
Who is Hari Om Rai, MD of Lava International?
According to Rai's LinkedIn profile, he joined Lava International back in 2009 and has been with the company for 14 years. Prior to that, he co-founded Pacetel Communications, which is an authorised distributor of Oppo and OnePlus phones in India.
As per his bio on LinkedIn, "In 2003, he co-founded Pacetel Communications in partnership with BBK Telecommunication Company, China (now known as VIVO) that ventured into landline and fixed wireless phones for selling co-branded products in India. Lava International is an offshoot of Pacetel."
The ED investigation began last year when an FIR was filed in New Delhi Police station against Grand Prospect International Communication Pvt Ltd (GPICPL) company alleging money laundering activities. GPICPL is one of the companies associated with Vivo Mobile Communications Co. Ltd. This led to raids at 48 locations associated with Vivo across the country.
Also Read:
Meet 'Jaguar', Israel's advanced military robot that can replace humans on the battlefield, borders
Meta CEO Mark Zuckerberg warned by top EU official about fake news on Israel-Hamas war, elections